Bollinger Band Harami Reversal Strategy
Summary
This strategy looks for Harami candle bodies after the preceding candle reaches an outer Bollinger Band. It calculates bands from the chart’s open, high, low, and close values, using a configurable moving-average length and deviation multiplier. A bullish setup requires the prior candle to close below its open and touch the lower band; a bearish setup requires an up candle touching the upper band. In either case, the current candle’s body must fit within the prior candle’s body.
On a signal, the script enters long or short and attaches fixed profit and loss exits. It also plots signal labels and provides corresponding alerts. The document supplies the rules as source code but gives no performance results, sample period, asset selection, or trading costs. The code labels its inputs as Heikin Ashi prices, but simply assigns chart OHLC values, so the chart’s candle type determines the actual data. Its fixed exit distances and cash sizing may also need adaptation to an instrument’s price scale and volatility.
Key ideas
- A bullish setup requires a prior down candle to touch the lower Bollinger Band and the current body to fit inside the prior body.
- A bearish setup applies the corresponding conditions at the upper Bollinger Band after a prior up candle.
- The Bollinger Band length and multiplier are configurable.
- Signals trigger entries with fixed profit and loss exits, plus chart labels and alerts.
- The document provides no backtest results or evidence of profitability.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.